Setting up an online competition business - Questions

NeVeR

Hi,

Three friends and I are looking to set up an online competition site, where customers buy tickets for different items and are entered into the competition.

From reading, this is classed as a lottery of sorts and therefore we'd need a license.

Does anyone know what license is needed or where to apply for one?

Any help would be great.

NB: I know we need to speak to a solicitor, but we'd like to find out as much as we can before doing so. - thanks

ARGINITE

Don't most of the online/facebook raffles avoid the whole lottery bit by requiring the customer to answer a question and hence turning it into a game of skill.

NeVeR

ARGINITE wrote: »

Don't most of the online/facebook raffles avoid the whole lottery bit by requiring the customer to answer a question and hence turning it into a game of skill.

I have seen this. But would that override the need for any license or any kind ?

Brendan Flowers

What about if you used a subscription model. Basically had it that users pay a monthly fee to use your website. Part of that use would include them being able to take part in the competitions on the site. Maybe that could be a way around needing a lottery licence?

Lord Nikon

ARGINITE wrote: »

Don't most of the online/facebook raffles avoid the whole lottery bit by requiring the customer to answer a question and hence turning it into a game of skill.

What if the question is a simple one, would this be a loophole, as it takes the game completely out of it.

ironclaw

Lord Nikon wrote: »

What if the question is a simple one, would this be a loophole, as it takes the game completely out of it.

I don't believe the definition of skill is given so even a simple question is considered a 'skill. It's why you get questions like '1 + 1 is...' with answers like 2, 4, 48 etc.

Online gambling in Ireland is very complex. There are a lot of factors besides the gaming license, which I'd imagine you'll need to get from much higher up as opposed to the local Gardai/court (Which do/used to issue them for raffles etc) You'll need auditors, specialised accountants and a few chats with Revenue.

From the tech side, you'll need a rock-solid website and security to match as they are prime targets of online thieves and opportunists (I've consulted on a few implementations) You'll also need to geo-fence it from areas where gambling isn't permitted.

The main loophole to avoid gambling laws is generally penny auctions i.e. Auctions you pay to place a bid on. So you could, in theory, win a car for €100 but if 1000 people bid and it's €10 to bid, the company makes money that way.

jimmycrackcorm

This is a good guide to what is needed.

Practical tips for compliance (and to avoid falling within the rules that require you to obtain a licence)

* Provide a free entry route: Entry should not be based upon purchasing a product and this should be communicated clearly.
* Ensure the competition is judged properly: It is important to have an independent observer (external to your organisation) to verify it was judged fairly.
* Ensure winning is contingent on the skill, not chance: Consider keeping a record/have a system in place that can demonstrate the element of skill
* Take care when using a question as to the basis for entry to a competition
* Beware of the language used

e.g. for point 2 a lot of Facebook type competitions actually hold the live video feed of the competition for everyone to see and use Google random number generator to pick the winning ticket - totally transparent. The entries are published in advance also so you can see that your ticket is in.