Are Online "Penny" Auctions a Form of Gambling?
Sunday, December 21, 2008
Gambling expert in U.K. wants investigation
Are web-based "penny" auctions - in which merhcandise can, as the name implies, be had for cheap - a form of gambling? Sites like MadBid.com offer British buyers the chance to score valuable items at a fraction of their normal price - making the whole process a kind of lottery, right? The whole story as it appeared on the BBC web site today:
Online "penny auction" sites are similar to lotteries and should be regulated in the same way, according to a gambling expert.
Penny auctions have gained popularity over the last few months and now have hundreds of thousands of users.
The sites auction new items, often for a fraction of their retail price, and bidders pay up to 1.50 pounds for each bid.
Professor Mark Griffiths of Nottingham Trent University believes the Gambling Commission "should look into this."
"I think bidding on penny auction sites is akin to a gambling-like experience," Professor Griffiths said.
"Obviously, when people are bidding again and again and again and they don't actually win the item in the end, that's very much like gambling." I did not expect to get the Mini when I started bidding
However, Juha Koski from online auction site Madbid.com disagrees:
"We have two experts who have given us their opinion on this.
"This is definitely a game of skill and would not form under any circumstances under the definition of gambling."
Happy winner
Successful bidders can win anything from a television to a car or a cash sum, for a fraction of its real cost.
Sandeep Anantharaman is one bidder who has won in style. He bid less than seven pounds for a new Mini. Not surprisingly, he is delighted:
"I did not expect to get the Mini when I started bidding. But once I got the message from the auction site telling me I'd won, I couldn't believe it. "
Penny auction sites have grown quickly and now have hundreds of thousands of users.
Concern
Unlike eBay, where you can bid for free, users have to pay between 40 pence and 1.50 pounds to place a bid. Bids automatically rise by 1p at a time, and some people make repeated bids.
Tony Northcott of the Trading Standards Institute believes some people may spend more than they realise on bids.
"My concern about these online penny auction sites is that people will bid for goods and not realise at the end of the day they may spend quite a large amount of money," he said.
The Gambling Commission said it could not comment on individual sites and was not convinced that penny auctions amounted to gambling.
However, it added that it would keep a close eye on developments in this area.
Are web-based "penny" auctions - in which merhcandise can, as the name implies, be had for cheap - a form of gambling? Sites like MadBid.com offer British buyers the chance to score valuable items at a fraction of their normal price - making the whole process a kind of lottery, right? The whole story as it appeared on the BBC web site today:
Online "penny auction" sites are similar to lotteries and should be regulated in the same way, according to a gambling expert.
Penny auctions have gained popularity over the last few months and now have hundreds of thousands of users.
The sites auction new items, often for a fraction of their retail price, and bidders pay up to 1.50 pounds for each bid.
Professor Mark Griffiths of Nottingham Trent University believes the Gambling Commission "should look into this."
"I think bidding on penny auction sites is akin to a gambling-like experience," Professor Griffiths said.
"Obviously, when people are bidding again and again and again and they don't actually win the item in the end, that's very much like gambling." I did not expect to get the Mini when I started bidding
However, Juha Koski from online auction site Madbid.com disagrees:
"We have two experts who have given us their opinion on this.
"This is definitely a game of skill and would not form under any circumstances under the definition of gambling."
Happy winner
Successful bidders can win anything from a television to a car or a cash sum, for a fraction of its real cost.
Sandeep Anantharaman is one bidder who has won in style. He bid less than seven pounds for a new Mini. Not surprisingly, he is delighted:
"I did not expect to get the Mini when I started bidding. But once I got the message from the auction site telling me I'd won, I couldn't believe it. "
Penny auction sites have grown quickly and now have hundreds of thousands of users.
Concern
Unlike eBay, where you can bid for free, users have to pay between 40 pence and 1.50 pounds to place a bid. Bids automatically rise by 1p at a time, and some people make repeated bids.
Tony Northcott of the Trading Standards Institute believes some people may spend more than they realise on bids.
"My concern about these online penny auction sites is that people will bid for goods and not realise at the end of the day they may spend quite a large amount of money," he said.
The Gambling Commission said it could not comment on individual sites and was not convinced that penny auctions amounted to gambling.
However, it added that it would keep a close eye on developments in this area.
posted by Chris and Frank at 4:19 PM
1 Comments:
I bet they are not!
Wanna Bet!
Bruce, Las Vegas
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