Failed House Raffle causes grief for owners
Learn a lesson from a failed house raffle in the UK due to the intervention of the UK Gambling Commission. The six bedroom house is currently still for sale.
Howard and Marie Lipsey, a couple from the Wirral were inspired by a successful property raffle in Devon. They are now living on the bread line due to losses from the raffle failure. They set up the raffle in a bid to offload the property due to declining real estate prices.
Tickets cost £25 and offered the chance to win a six bedroom home in West Kirby. The house was valued at £725,000 during 2006.
Unfortunately, the raffle had to be put on hold just weeks after it was launched. The reason was a complication highlighted by the UK Gambling Commission. Apparently, the problem was with a skill based question and by the time the problem was resolved too much time had lapsed to re-launch the competition. It took 5 months for the problem to be resolved. By that time it was a failed house raffle.
Only 400 tickets were sold before the competition was stopped so there was only £10,000 in the kitty. It was not enough to fund a re-launch of the competition and barely covered the cost of setting it up in the first place. Also the closing date was too soon to enable marketing to be successful.
The grief which followed
Now the family receive regular threats from people who purchased raffle tickets for the house in good faith.
Mr Lipsey said the failed house raffle had turned out to be a living nightmare. Inspired by the success of property raffle in North Devon, Mr Lipsey, a former Property Director thought they could make a success of it.
Such has been the amount of grief, the family have put the house on the market again. They have vowed to repay all the raffle competition entrants from the proceeds of sale. Mr Lipsey has signed a legal agreement prepared by a Solicitor to confirm this in an endeavour to placate the backlash from many raffle entrants.
Mr Lipsey says that although it is not his fault he takes full responsibility for the problem.
Involvement of the UK Gambling Commission
In this situation the role of the UK Gambling Commission seems to have fallen short of being helpful. They have since published a warning to home-owners who are contemplating holding a house raffle to take legal advice before doing so.
The argument seems to be that a house raffle may be seen as an endeavour for commercial gain by the house owner. Although the warning is not very specific it does provide some useful information. Apparently a property raffle falls under the category of Free Draws or Prize Competitions
A Free Draw can be run commercially for private benefit but there must be a method of free entry.
A Prize Competition must include an element of skill, judgement or judgement. The aim is to make sure a significant proportion of people cannot participate and prevent many of those that do from receiving a prize.
There is one other significant requirement. A property raffle must benefit a non-profit cause such as a charity, hospice or an air ambulance service.
So holding a house raffle can be legal if it is set up in the right way.
One way of ensuring compliance with the law would be for the UK Gambling Commission to grant licences for house raffles. This would not only benefit the house owner but also, it would help entrants to see that such a competition does comply with the law.
A failed house raffle can be extremely damaging as we can see from the article. Looking after the consumer by requiring a licence for high value raffles might be a good idea?
Other UK Property Raffles
If you want to see details of all the UK Property Raffles available visit this webpage.