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  • #978501
    Nisse
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    • Total posts: 4
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    Hi,

    I am thinking about doing a reverse auction, i.e. lowest unique bid wins (this will likely be a one time event), and I am wondering if it is true that this is not permitted in Victoria (or Victorian residents are not allowed to participate), as it is considered a lottery.

    If this is the case, is it completely so, or are there any permits you can get?

    Thank you.

    #1107567
    Robert Gerrish
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    Hi Nisse

    That’s an ‘interesting’ business to get into…plenty of bad press around that business model in recent times. I cannot answer your question, but the Vic Gov are very responsive, you could try contacting them directly through this link: http://www.vic.gov.au/contact.html

    Best of luck

    Robert

    #1107568
    King
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    Normally for any ‘game’ unless it is a game of skill, you will need a permit in every state except for Qld and WA.

    Each state has their own interpretations with reverse auctions.

    In Victoria you will need to have a police check completed plus having your application processed by the Dept of Gaming and Lottery or equivalent sort of name.

    In the past, this process has taken up to 6 weeks.

    #1107569
    Nisse
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    King, post: 119393 wrote:
    Normally for any ‘game’ unless it is a game of skill, you will need a permit in every state except for Qld and WA.

    Each state has their own interpretations with reverse auctions.

    In Victoria you will need to have a police check completed plus having your application processed by the Dept of Gaming and Lottery or equivalent sort of name.

    In the past, this process has taken up to 6 weeks.

    I just got around to do more checking, and the response I got is:
    “This is considered an illegal lottery and would not be permitted to be
    held.”

    #1107570
    PRO
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    • Total posts: 450
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    Hi

    This depends on how it is structured. We have done the legals for some of the penny auction sites you see in Australia.

    The interactive gambling act http://www.comlaw.gov.au/Series/C2004A00851

    is a good start to making sure that what you are doing is not gambling, which penny auctions definitely are not.

    good luck

    #1107571
    Nisse
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    Hi,

    Do you think it’s possible do a variation of what I want, which is lowest unique bid wins (fees on each bid), that’s equal in value and not too complicated (penny auction would not work in my case)?

    I would be hiring someone to help with the legals, at this point I’m just deciding if it’s worth pursuing.

    #1107572
    JustJames
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    Is the term “reverse auction” being used correctly here?

    Reverse auctions are normally used as a way of awarding a contract to supply, as a way of forcing would-be vendors to submit their lowest price.

    In other words, the winner of a reverse auction wins the right to supply, whereas the winner of a “regular” auction wins the right to buy.

    James

    #1107573
    Nisse
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    That is possible, although I’m still referring to a type of auction that allows the user who places the lowest unique bid to buy the product (in this case a property).

    #1107574
    PRO
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    Hi Nisse

    There should be a way to do this.

    I would also look at the use of an option contract for the property and then the winning bidder either gets the option or you could make terms of the winning bid that the bidder must grant you a power of attorney to assign the option and settle the property. If not structured properly there would be double stampduty issues among other things.

    My firm works on fixed prices for this sort of work where would give you a fixed price for each of the following stages and you would be free not to progress to the next stage.
    1. Advise on the legality of the entire concept
    2. structure the process correctly from a legal, asset protection and taxation point of view
    3. Do the terms and conditions for the website
    4. Draft all of the documents required to handle the relationships between bidder, seller, company etc etc etc

    email me on the law firm address with a fairly detailed description of how you would envisage it working ( I won’t be able to share that information with anyone outside of my firm without your permission then) and I can have a quick look and a quick chat to my partner the tech specialist to see if it has legs and if so we can work out costs for you.

    regards

    D

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