The ‘penny’ has dropped
Penny auctions – something we didn’t know too much about – have been reported in the news recently.
Dr. Mark Griffiths – Professor of Gambling Studies at the University of Nottingham – will be assessing the reasons why ‘the activity [of bidding on penny auctions] is akin to gambling’, in January’s edition of World Online Gambling Law Report.
To participate in penny auctions, bidders place a bid by sending a text message (at £1.50 per bid, plus operator’s costs), or by creating an online account where the bidder buys a ‘bundle’ of bids. There is no limit on the amount of bids that can be made on the same auction product. There is also no time limit for the sales time, however if no bids have been made for e.g. five minutes, then the auction is automatically closed. There are also auction opening times, which are product specific (e.g. 10am – 10pm). If the product has not been sold by the stipulated the time, the auction will continue again the next morning.
Griffiths stated that penny auctions are similar to lotteries and the UK’s Gambling Commission should investigate whether they should come under regulatory jurisdiction.
However, the Commission said that it is not convinced that penny auction sites constitute gambling, but said that it will monitor developments in the area.
As penny auctioning is new – well, to me anyway – I will be watching closely to see whether the Commission will take any regulatory steps – as suggested by Griffiths – in 2009. In the meantime, have a very Merry Christmas and a lovely New Year!
Sarah Syed
Dr. Mark Griffiths – Professor of Gambling Studies at the University of Nottingham – will be assessing the reasons why ‘the activity [of bidding on penny auctions] is akin to gambling’, in January’s edition of World Online Gambling Law Report.
To participate in penny auctions, bidders place a bid by sending a text message (at £1.50 per bid, plus operator’s costs), or by creating an online account where the bidder buys a ‘bundle’ of bids. There is no limit on the amount of bids that can be made on the same auction product. There is also no time limit for the sales time, however if no bids have been made for e.g. five minutes, then the auction is automatically closed. There are also auction opening times, which are product specific (e.g. 10am – 10pm). If the product has not been sold by the stipulated the time, the auction will continue again the next morning.
Griffiths stated that penny auctions are similar to lotteries and the UK’s Gambling Commission should investigate whether they should come under regulatory jurisdiction.
However, the Commission said that it is not convinced that penny auction sites constitute gambling, but said that it will monitor developments in the area.
As penny auctioning is new – well, to me anyway – I will be watching closely to see whether the Commission will take any regulatory steps – as suggested by Griffiths – in 2009. In the meantime, have a very Merry Christmas and a lovely New Year!
Sarah Syed
Comments