Are Online Penny Auctions Actually Gambling?
A few weeks back, we wrote about a site that seemed to have modified the old “dollar auction” concept and created a borderline evil business plan that would get plenty of people to pay money to “bid” on way underpriced goods. People keep bidding, because the costs seem so low — but since everyone has to pay to bid, the companies ends up making a ton of money — often many times the actual cost of the product. Basically, the company and whoever “wins” the auction are likely to make out okay — while every other bidder loses. Apparently, there are a number of such sites doing similar models, and the UK government is noticing that it’s pretty similar to gambling and probably should be regulated as a gambling site. The reasoning is that people are paying money and might not get anything back for it — which makes it akin to gambling. However, depending on how these sites are run, it’s not as though the results are a real gamble — it’s still about whoever bids the highest for a good, so i
