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House Raffle - they get worse


Frank Hovis

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Frank Hovis

This one is a £350k (valued by the rafflers...) house at £5 a ticket with the maximum number of tickets being 150,000.  So £750k.  or 10% to charity so £675k.  Not bad for a slef-valued £350k house.

Big free publicity in the paper and but there was this intriguing word "enough":

 

Quote

 

One day left to win a £300k Plymouth home for just a fiver

What a bargain, and the money goes to two great causes

The gorgeous house is valued at more than £300,000 but the couple have chosen to launch an automated raffle system to raise the asking price.

If enough tickets are sold, the winner will be handed the keys and the money raised will go to two charities.

But if enough money isn't raised, the winner will still walk away with a cash prize.


 

 

https://www.plymouthherald.co.uk/news/plymouth-news/georgian-home-raffle-property-plymouth-1818117

 

I wondered what "enough" would be?  Well given that they are supporting these charities out of the goodness of their hearts and accepting their self-valuation of £350k then it should be 70,000 from which they get £315k and the charities £35k.

So I clicked on the promotion link.

Nothing.

Then I clicked on the terms and conditions which you have to open in a .pdf which will dissuade most people; but I wanted to know what constituted this "enough" so I opened it.

And here you go

Quote

If the Maximum Number of Entries to the Competition is not equal to the number
of entries received as at the closing date, the Competition will close and the
proceeds will either be deemed sufficient to award the house as a prize at the
discretion of the promotors
, or the remaining funds will be allocated as a cash
prize to a winner after the deduction of any expenses and marketing fees.

The Promoters will be entitled to retain 10% of the Entry Fees to cover
administration and marketing expenditure. A further 10% of the Entry Fees will
be paid to the 2 charities. The remaining balance following deduction of the 20%
is “the Prize Fund”. The Prize Fund will then be distributed to the winning Entrant;

 

So it's entirely up to them.  In theory they could sell 100,000 tickets (or 149,999, but the numbers are easier!), bringing in £500k.

They can they decide "that's not enough", keep £50k, keep their house, £50k goes to charity and £400k as cash prize to one tcket holder.

Why doesn't everyone raffle this house in this way every year and make £50k and so not need to work? 

Possibly because some of have morals and don't seek to profit from people's stupidity.

 

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40 minutes ago, Frank Hovis said:

Why doesn't everyone raffle this house in this way every year and make £50k and so not need to work? 

Possibly because some of have morals and don't seek to profit from people's stupidity.

Also, it sounds like a disaster waiting to happen from the legal perspective. I'm not a lawyer, but from my reading on the subject I understand you need a licence to hold a lottery that makes more than 20k, and if you want to label it as a non-commercial lottery, you have to

a) Prove that you didn't make money on it (so you could only cover they reasonable "administration and marketing expenditure" and a reasonable - not self-valued - value of your prize)

AND

b) Make sure prizes don't exceed £500 and expenses stay under £100 :D:D:D

Also, I'm not sure if Gambling Act allows you to invalidate sold tickets if you haven't sold "enough". By purchasing a ticket I'm entering a contract with you.

Then you have "games of skill", which are different, but it looks like they need to allow free entries, so again it's a bummer.

As I said on ToS, I'm seriously considering entering ALL such raffles and then trying to force the organizers to abide the law to the letter. I might end up becoming an accidental landlord :P

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On 24/07/2018 at 12:08, Frank Hovis said:

Why doesn't everyone raffle this house in this way every year and make £50k and so not need to work? 

Possibly because some of have morals and don't seek to profit from people's stupidity.

Or more likely there's barely enough people buying tickets to make it worthwhile even for the few raffles like this on the market now. I remember one actually being awarded as a prize, in the '80's, but I haven't heard of one since. Surely everyone must realise it's a scam?

I do think they might be an indicator of the peak of the market, though; a kind of benign ringing of a bell. They certainly can't influence the market itself in any way unless a significant fraction of people start spending thousands of pounds on raffle tickets every year.

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