There have been a number of concerns raised about scratchpad lotteries. Many attempt to circumvent the law by claiming that entry is free and that all entries will win a prize. In many cases, however, prizes have to be claimed by telephoning a premium rate telephone line, the cost of which is often in excess of the value of the prize won.

 

The Gaming Board regards these lotteries as misleading and in some cases unlawful. A recent High Court ruling indicated that the issue of whether a scratchpad is unlawful rests on how the cards are distributed by retailers.

 

Where the cards are an advertising strategy to entice consumers into buying a product they may be unlawful since they have, therefore, been issued for commercial gain. If, however, the scratch cards are issued with a newspaper or magazine, they may not be construed as being a selling factor but incidental to the purchase.

This continues to be a grey area and only a court can define authoritatively whether a particular lottery is unlawful or not. It is for the police to investigate allegations of fraud or dishonesty.

 

The Independent Committee for the Supervision of Telephone Information Services (ICSTIS) supervises the conduct of premium rate telephone services. ICSTIS has a published Code of Practice governing the conduct of telephone competitions and their legality. More information is available on the ICSTIS website. It does not, however, have any powers of prosecution.

 

 

Pyramid Schemes
In May 2002, DCMS issued a consultation letter concerning the laws on prize competitions and lotteries. This followed the Independent Gambling Review that DCMS published in July 2001.

 

The Government published its conclusions in A Safe Bet for Success (2002). The intention is to ensure that there is a clear distinction between prize competitions and lotteries. In future, a prize competition run for commercial gain must involve a degree of skill or knowledge to secure a prize or offer a genuine free entry route to participants. A Bill will be introduced into Parliament to bring forward changes to the gambling laws as soon as Parliamentary time permits.

 

A payment which is required to claim a prize to find out whether or not the player has won will be treated as payment for entry. Submission of an entry by post or other media (e.g. first class post or standard telephone call) will be treated as a free entry.