House 'auction' illegal

20 January 2009

A Christchurch couple’s plan to sell their house by a novel auction would be illegal gambling and the public is advised not to participate, Internal Affairs’ Gambling Compliance Manager, Debbie Despard, said today.

Would-be buyers book a seat at an internet auction for $100 each with the house going to the lowest unique bid between 1c and $1000.

Debbie Despard said under the Gambling Act 2003 the auction is illegal on several grounds.

“There is a huge element of chance in this so-called auction in which people pay to participate,” Ms Despard said. ”It is also online gambling, which the Act defines as ‘remote interactive gambling’. Gambling with prizes exceeding $500 can only be conducted by societies raising money for authorised charitable purposes but this sales scheme is conducted by a private person for personal profit and cannot be licensed by the Department.

“Participating in illegal gambling is a criminal offence. Also, any sale and purchase agreement arising out of such an auction would be on shaky ground because the Gambling Act says contracts relating to illegal gambling would be illegal for the purposes of the Illegal Contracts Act 1970.”

The Department has advised the Trade Me and Premier Realty websites that the proposed sales method is illegal and is also contacting the Real Estate Institute of New Zealand.

Media contact:
Debbie Despard, National Manager Gambling Compliance, Department of Internal Affairs, ph 04 494 0617; cell 021 246 3928
Trevor Henry, communications adviser, Department of Internal Affairs
Ph 04 495 7211; cell 0275 843 679