Legality of setting up a Pool-based website

Lord TSC

So, I think this would be the right place to ask, but I'm not 100% sure. And that's cause I'm not sure how much it verges into gambling and competitions.

Basically, I was thinking of setting up a new website whereby people would be asked to predict a series of events for points. I was thinking of having multiple tiers, so to speak; there'd be Free-to-play portions and then there'd be Entry-Fee-to-play portions of various levels too. People would pay, say, a fiver to play, and at the end, the Top 3 players would receive percentages of the entry fee (1st wins 60%, 2nd 20%, 3rd 10%, etc). It would be something I reckon occurs on small scales within some offices (has done in the last two I worked in on Grand National week and with the Premier League).

So is that considered "gambling", per se? In which case, do I need licenses or to do anything special before setting up such a website? Or would it be, in simplistic terms, acceptable to just create a website, get things going with a Paypal account and let it run naturally? I wouldn't want to be breaking any laws in the process of setting up the game.

(And yes, I know it's not a hugely unique idea; I'm not spelling out what I plan to do as my main draw with it )