UK Regulator Warns Consumers Over Facebook Lotteries
The regulator has warned consumers about the potential risk of participating in Facebook lotteries. The Gambling Commission has issued guidance on staying safe and clarified when organisers need a licence when operating lotteries.
The UK Gambling Commission has warned consumers about the dangers of lotteries or raffles promoted on social media sites such as Facebook. The regulator has told the public that just because they are advertised on well-known platforms, it doesn’t mean they are being run legally.
The Commission also warned those running such competitions that they could actually be breaking the law and could face action.
The regulator states that The Gambling Act 2005 defines a lottery as “a game of chance where the player pays to enter for a prize” and that raffles and tombola are included in this definition, making them a form of gambling too.
They add that lotteries cannot be run for either private or commercial gain, and most can only be run for good causes. The Commission cites charities, hospices, air-ambulance services, sporting or cultural clubs or other not-for-profit causes in their examples.
The Gambling Commission state that the number of reports they are receiving about social media lotteries has been on the rise, especially over the last couple of years. They add that many of the lotteries they see advertised are illegal, posing a serious risk to those who participate in them due to the lotteries not benefitting from consumer and gambling protection rules.
Along with warning consumers over the dangers of unlicensed lotteries, the Commission also warn potential lottery organisers that they could be falling foul of the law if they do not follow the rules.
The regulator states you need a licence to run an online lottery. These lotteries include lotteries on social media, selling or auction sites, fundraising platforms, and running a lottery during a live streaming service. A licence needs to be applied for from the Gambling Commission to run a lottery or raffle with ticket sales of more than £20,000 per month or £250,000 in a calendar year. For lotteries below these amounts, a person (or company) needs to be registered with a local authority.
The guidelines on the UKGC website states: “The only lotteries that can be advertised online are those run under a licence or registration with a local authority, or a lottery being run at a physical event with the tickets being sold at that event.”
It goes on to warn: “If convicted, you could be fined or imprisoned. You could also be breaking the terms and conditions of the site, which could lead to your profile being removed.”
The Commission adds that there are other ways in which competitions can be run that are not classed as a lottery and for which a licence is not required, such as free draws and prize competitions. The Commission also gives some advice to consumers on how to spot a scam lottery.
They advise that if you are being asked to send payment via PayPal to an individual or an individual’s bank account, this is a warning sign that it is likely to be an illegal lottery.
The Commission warns against sending money overseas or phoning an international or premium rate number. The regulator also advises checking the wording of an advert carefully. For example, suppose you see phrases such as “winning will change your life”. In that case, this should also be a red flag as, under advertising rules, a gambling product is prohibited from suggesting they are a solution to financial difficulties.
Additionally, they advise that if you feel a lottery is illegal and run without a licence, you should complete the reporting form on their website.
Finally, if you think a lottery is a scam, you should report it via the ActionFraud website.